Home » Uncategorized » Rwanda`s new FinMin to keep policies for growth amid aid freeze

Rwanda`s new FinMin to keep policies for growth amid aid freeze

The New Finance Minister, Amb. Claver Gatete has noted that he had no plans for a major shift in macroeconomic policy.

ImageAmb. Gatete made a presentation on the Monetary Policy and Financial Stability Statement at Kigali Serena Hotel on February 15.

Gatete said that the year 2012 has been marked by economic turbulences which any central bank world-wide had to deal with.

The present Monetary Policy and Financial Stability Statement reviews how BNR has managed the different risks paused by the global, regional and domestic economic environment while sustaining the high economic growth and low inflation that Rwanda has registered in 2012.

Gatete was credited by many economic experts with overseeing a period of relative monetary stability during his almost two years at the helm of the central bank at a time inflation soared and currencies slumped in east Africa’s biggest economies like Kenya.

Mark Bohlund, senior economist for sub-Saharan Africa at IHS Global Insight told Reuters that the reshuffle is unlikely to have more than a marginal effect on economic policy.

“The most immediate priorities for Gatete will be how to reduce the impact from budget support suspensions and guiding Rwanda to a sovereign bond issue.”

Donors last year suspended or delayed aid worth tens of millions of dollars over allegations Kigali was backing a rebellion in neighboring eastern Democratic of Congo.

But recently some donors countries such as UK and Germany have resumed aid to Rwanda. On the 1st of March The Independent published an article that was titled “Britain is to give £16m Rwanda aid direct to humanitarian agencies”.

The UK international Development Secretary, Ms Greening said that the reprogrammed development will be channeled through projects that directly reach and protect the poorest people in Rwanda.

From Ms Greening comments, one can understand that this funds will not be directly channeled to the government of Rwanda but through development agencies in Rwanda.

Earlier this February, Gatete made a preliminary forecast the country’s economic growth would slow to 7.1% in 2013, lower than previously predicted and below a targeted 8%.

The aid freeze has complicated Rwanda’s plans for a sovereign bond aimed at raising $350-million.

An issuance was planned for late last year, but this was put off due to the negative publicity over the aid suspension.

Rwanda’s economy grew 7.7% in 2012, outperforming Kenya, Tanzania and Uganda.

Macroeconomic policy would be “a continuation of what has been achieved”, Gatete was quoted as saying by Reuters.


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